February 19, 2018 / 10:54 AM / 2 years ago

Euro zone ministers likely to choose Spaniard to succeed ECB vice president

BRUSSELS, Feb 19 (Reuters) - Euro zone finance ministers are likely to agree on Monday to back Spanish Economy Minister Luis de Guindos to succeed European Central Bank Vice President Vitor Constancio in May, a move likely to boost the chances of a German becoming the head of the ECB next year.

The discussion among the finance ministers of the 19 euro zone countries is informal, with a vote scheduled only for Tuesday when they will have to decide between the Spaniard and Ireland’s central bank governor Philip Lane.

A senior euro zone official involved in the preparation of the meeting has said the preferred scenario was that there would be no vote but one person would be chosen by consensus.

If there were to be a vote, the successful candidate would have to get 14 out of the 19 votes and these would have to represent 65 percent of the euro zone population.

The European Parliament’s economic committee, which has only a consultative role, said after an informal hearing of both candidates last week that Lane was a better choice, but euro zone officials said de Guindos was the favourite.

Lane was more likely to get the job of ECB chief economist after Peter Praet when the post becomes vacant next year, they said.

The choice of a southerner like de Guindos for vice president increases the chances that a northerner like German central bank governor Jens Weidmann could be elected to replace Mario Draghi as the ECB head in 2019.

“It looks like that is the case,” one euro zone official said. “But it is a chess game and we don’t know all the players yet. Lane would be well placed as chief economist but Weidmann depends on the distribution of the big jobs in 2019.”

The “big jobs” include the head of the European Commission, the chairman of European Union leaders and the head of the European Parliament — all of which will come up for replacement in 2019.

Euro zone officials said Weidmann could get the ECB top job if, for instance, a Frenchman became the head of the European Commission — someone like the EU’s chief Brexit negotiator Michel Barnier or the head of he IMF Christine Lagarde.

Picking the Bundesbank chief for the ECB presidency may be tricky, even though Weidmann is considered a top-notch central banker, because he has alienated some officials with his opposition to the ECB’s ultra easy monetary policy, which is credited with reviving economic growth.

Some other central bank governors regarded this as disloyalty in a time of crisis.

Weidmann has also ruffled some political feathers, engaging in public exchanges with former Italian prime minister Matteo Renzi by criticising Rome’s performance in cutting its debt.

After joining the losing side in the ECB’s biggest decisions to stimulate the economy, Weidmann could also struggle to unite the Governing Council, which rarely takes votes and strives for the broadest possible consensus. (Editing by Matthew Mpoke Bigg)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below